Communities Dominate Brands

Taipei is one of the world's most connected cities

Taipei is one of the world's most connected cities. Personal computer usage in Taiwan is high, with 88 per cent of households using a computer - and 83.6 per cent us ing the internet, compared with around 65 per cent in the UK and just under 70 per cent in the US.

A remarkable 89.3 per cent of Taipei's 5 million residents have broadband access and the entire city will have free wi-fi access by the end of the year - the first in the world to have that facility.

Reports the Observer

Embedded in this story is another story about Yahoo and a service called Yahoo Knowledge

The service allows users to post and answer questions, sharing their expertise online with Yahoo's 50 million other unique users.

Yahoo! claims Answers demonstrates it is prepared for the next phase of the internet's evolution. 'The battleground so far has been about who has the most powerful and fastest search engine, but, increasingly, it will be about relevance and context', says Stephen Taylor who runs its European operation

Question: Does interruptive advertising often have that specific context?

In a world of search - specificity and context are everything.

Like the newest stars in the internet fi rmament, including YouTube and Flickr, Answers relies on user-generated content. Users are also awarded points for useful answers and ranked accordingly, which gives Answers a community feel shared by other social networking sites like Rupert Murdoch's MySpace. They are coveted by internet companies because their users keep coming back, and advertisers can exploit their loyalty by running targeted campaigns.

Science calls this Reeds Law

User collaboration is key to new web advice service

Also Boston Developing Plan For Citywide Wi-Fi

Telecoms networks rush to cash in on user-generated content

Home videos, beauty contests and party stunts: the future of mobiles

Copying YouTube and MySpace may at last give phone groups a use for 3G

Informa has some stats on video community users

2006: 46m $35m -- 2007: 63m $51m -- 2008: 81m $70m -- 2009: 110m $95m -- 2010: 146m $114m -- 2011: 199m $132m

But why why why is this happening? Should be the question on the lips of strategy directors at all mobile companies.

We are all onto something

Virgin Mobile's head of digital services and new product development, Nick White, reckons such services are attractive to consumers because they represent "the collision of 'everybody can be a celebrity' with 'everybody's got a platform to perform on'."

This year Virgin Mobile ran a competition to find a new band to open the V Festival outdoor music event. Now that Virgin Mobile is part of the NTL cable empire, it is looking to put user-generated content on TV, increasing the attraction of getting involved.

Rival O2 ran a similar search for a new band, called O2 Undiscovered. It has also been experimenting with user-generated content through its "Look At Me" service, where users send in clips of themselves doing a party piece, in the hope that other people will watch.

"We are all on to something," says Russ Shaw, capability and innovation director at O2. "We are seeing some of these sites start to get real traction online and now we are seeing similar things happen in the mobile world."

Yeah but what is that something - and I can tell you its a little bit beyond "I can be a celebrity"

But it seems that marketeers like to reduce to the lowest common denominator - prefeering shallow insight to deep insight that ultimately could unable them to be more successful, more profitable, more valuable as a brand and reduce churn.

Apparently Vodafone are thinking about creatng their own mobile commuunity - now thats interesting.

Because we tried so hard to get Vodafone to take on a project that really could have taken them to the heart of peer to peer flows of communication. Hey guys its still on the table if you are interested.

Its called This is Modern Britain. So if any other telecoms operators out there want a global format with a local footprint that is designed and built to initiate massive dataflows, designed to change behaviour, created, not out of shallow insight but a deep understanding of why we are uploading downloading and sharing we would be very happy to hear from you.

Rather than innovating, people copy - but why are You Tube and Myspace so successful, google, ebay, Craigslist - because they innovated.

Groundbreaking book says Mike Grehan at the ClickZ Network

Our book keeps receiving wonderful endorsements and reviews. Mike Grehan, an author of several books including Search Engine Marketing, is a columnist at the Click Z network for marketers. Mike wrote a piece called A Grand Plan for SEO. In it he discussed the emerging power of customer communities and then refers to our book in very warm words, writing:

"In a connected world, communities hold great power, and not just via hyperlink analysis on the Web. The groundbreaking book "Communities Dominate Brands" provides a truly realistic glimpse into the way communities have affected the way we market. Communities have huge pulling power on brands and at search engines. Tapping into those communities using multichannel programs and radically rethinking old-style advertising techniques is the future of marketing."

Thank you Mike !

(PS remember you now also search inside the book at Amazon)

How can ESPN Mobile fail in America?

Another death in mobile was already broadly covered in the blogosphere and the mainstream news. ESPN Mobile, the MVNO (Mobile Virtual Network Operator) in the USA, owned by Disney, has announced it is discontinuing its service and now will sell some of its assets and services to big carriers in America. It is offering refunds to existing customers. ESPN Mobile had according to industry gossip acquired only 30,000 subscribers in the USA, at a time of strong subscriber growth in that market.

How is this possible? A very strong brand (those who don't know the American TV broadcast market, ESPN is one of the most powerful cable TV brands, offering 24 hour sports on numerous ESPN channels. Similar to Eurosport in Europe, only much more powerful within the American TV market). ESPN offered additional value propositions around sports themes, it wasn't entering mobile telecoms as a low-cost MVNO, like Telmore in Denmark or Saunalahti in Finland. But rather it offered a targetted branded offering to a specific niche market, like the very successful Amp'd aiming for the youth market in the USA.

Actually it is not easy to bridge the broadcaster to MVNO offering. Finland saw its biggest commercial TV broadcaster MTV3 (that stands for "Mainos TV 3" - not in any way MusicTV "MTV" related) launch as an MVNO, achieve modest user success, and terminate its MVNO service. The "real" MTV ie MusicTV launched in Sweden as an MVNO and struggled early until discovering its proposition. But now MTV is so happy with the success that they are expanding into other European markets such as their recent launch as an MVNO in Germany. And in Belgium, radio broadcaster NRJ is a successful MVNO. Certainly it is quite possible to make that transition, but like we've said in our book Communities Dominate Brands - indeed as I say in my earlier business book for telecoms, m-Profits - an MVNO is not an automatic license to print money. The most famous of the MVNO's - Virgin Mobile, while very successful in the UK, USA, Australia and Canada, failed miserably in Singapore. So not every MVNO can succeed in every market.

My first thought is this. ESPN had all the cards. In a market where Virgin USA and Amp'd and dozens of other smaller and targetted MVNOs are able to achieve profitable business, there is NO REASON whatsoever for ESPN failing (having lost by some rumours as much as 50 million dollars???). There must have been a total, utter, lack of professional competence in its management ! How is it conceivable that Disney, ESPN's owners, did not bring in COMPETENT management or at least management consultancy, to fix issues before they became this bad. Disney knows perfectly well, that TV viewership is declining. They know their viewers are shifting their time to online interactive media, to the internet and to mobile.

And Disney should know - they were after all involved in Japan from the launch of the first mobile internet service from day 1 - that there is an inevitable global trend from the fixed internet to mobile internet - 58% of all internet users already access the web via mobile phone some of the time (majority of the time via PC of course) and 25% of the internet users - mostly in Japan, Korea and China - access the web exclusively on mobile phones. For ANY TV brand to survive, they HAVE to start the migration to mobile. This was the obviously consensus lesson from the second annual TV mobile conference I just chaired this week here in London.

Telmore took 20% of the Danish telecoms market. Saunalahti was sold in a record making deal in Finland that put the MVNO managers in charge of their now "parent" Elisa Group. Virgin mobile is in the dominant brand position in its merger here in the UK with NTL the cable TV operator. Alan Moore and I have been tracking the MVNO space, and offered countless lessons from both the successes and failure of MVNOs around the world. There are dozens of totally competent experts who could have saved Disney literally millions - and helped move ESPN from a disaster into a blazing success. I have to say ESPN fails only because of management incompetence. Utter and total incompetence. Shame on you ESPN and shame on you Disney!

Meanwhile Disney is putting on a brave face. They say this ESPN fiasco has no impact on its Disney Mobile MVNO offering targeting young phone users - or obviously their parents as a family offering. So far so good. If Disney was in the least bit honest about this, why did they recruit UK based MVNO management and then announce they won't launch here?

We have said it so many times before, and we have to once again remind it. Americans do not understand mobile telecoms (cellular, wireless, cellphones) and the carrier (mobile operator) business. The American mobile telecoms industry lags the whole industrialized world having fallen to second-to-last, with only Canada behind it. This is so ironic, because the whole technology was invented in America and many of the global giants such as Motorola, Lucent (now with Alcatel), Qualcomm in the USA and Nortel and RIM (Research In Motion - ie Blackberry) in neighboring Canada, not to mention the concerted future efforts from major players like Microsoft, Google etc all focusing their future to the inevitable future platform for their offering - mobile.

All of the innovation in the industry comes from Europe and Asia! The first generation cellphones were not introduced in the USA commercially. They were introduced by NTT DoCoMo in Japan. Second generation (digital) cellphone first launched in Finland by Radiolinja (now part of Elisa). Third generation was launched again in Japan, again by NTT DoCoMo. SMS text messaging - 41% of Americans already send texts - this is a four year lag from the European average - and text messaging is growing faster than IM Instant Messaging - yes with more users - and e-mail use has plateaued, with youth reporting a decline in e-mail use (following the trends first observed in Asia six years ago). SMS text messaging entered American mainstream use in 2002 and still today American Idol is the single most powerful agent for teaching Americans how to text. SMS was launched by Elisa in Finland in 1992.

The mobile internet? NTT DoCoMo's iMode is considered the commercial launch of the mobile internet, that happened in 1999. Value-add content on phones? The first value-add content was the humble ringing tone - first launched in Finland by Saunalahti in 1998. Cameraphones? J-Phone (since Vodafone KK now Softbank) launched the first mass-market cameraphone line and picture messaging service in 2001.

The innovation has not only been in Japan and Finland. Mobile payments? Norway first launched an SMS based mobile parking solution in 2000. Music sales to phones? iTunes may have introduced music sales over the web and iPod launched in 2001 in America, but it was the Koreans who invented the world's most used music download technology - direct to mobile phones - in 2003. Digital TV broadcasts to mobile phones? South Korea launched commercially last year. I could go on and on and on.

America has lost the plot. While the major carriers consolidate and face declining market shares, the biggest growers tend to be the foreign players. T-Mobile was a trivial also-ran until the German parent came in and today T-Mobile is one of the giants. Virgin Mobile as an European "East Coast" invasion and Helio as a South Korean "West Coast" invasion are scaring the domestic telecoms executives to the point of losing sleep.

And here is the saddest part. it is NOT rocket science. Americans are brilliant at competitiveness and marketing. Telecoms is today not a technology race, it is ONLY about competition and marketing. That is why my third book, 3G Marketing, became the fastest-selling telecoms book of all time. Not one word about 3G technology, simply on how to do basic marketing in the mobile telecoms space, to succeed in the wars of churn, with new issues such as customers with multiple subscriptions. What level of sheer arrogance for American mobile telecoms management to ignore all the huge global success consistent in EVERY MARKET from Singapore to South Africa, from Belgium to Brazil. That somehow global trends and lessons would not work in the USA?

So yes, ESPN should not have folded. Utter sheer incompetence. They could have hired any reasonably competent management from a successful MVNO in Europe to turn that thing around. Or even less expensively, brought in a bit of understanding from any one of a dozen top consultants who are continuously quoted on these topics.

One little plug - I wrote a "Thought Piece" on the MVNOs earlier this year, as a follow up to what is in our book. That Thought Piece is a pdf file you can have of course for free. So please drop me an e-mail at  tomi at tomiahonen dot com  and I will send it to you. Its not the deep insights on how to make money in telecoms - for that you have to buy my book m-Profits - but this simple document at least catalogues several of the early successes worldwide in MVNOs, and explains some of the basics of what you have to do in the minimum to make an MVNO turn a profit.

BenQ Bankrupt: Sad end to former giant of mobile phones

Today brings sad news for the legacy of a former giant and massive major player in the history of mobile telecoms. BenQ announces insolvency and will end its commercial operation. BenQ is not universally known as a brand, even among mobile phones. Until last year the vast majority of that business was the mobile phone manufacturing arm of Siemens the global IT and engineering giant from Germany. Taiwanese phone maker BenQ bought Siemens's phone unit last year.

Siemens had always been a player of engineering excellence and obviously very long history in telecoms worldwide. Some of the Siemens mobile phone innovations included the world's first colour screens on mobile phones (four colour screen on the S10), the first slider phone, the first GPS phone and one of the very first musicphones. Siemens also had a long history of very committed, resourceful and cooperative participation in telecoms standardization and a long legacy of helping developing markets and countries adjust and evolve their infrastructure and even their telecoms legislature etc.

Siemens mobile phones was also one of the giants. Until very recently - just two years ago - Siemens phones held a solid 4th place in world shipments and a 7.3% market share. Today BenQ market share is down to 3.1% and a ranking of sixth, less than half the sales volume of its nearest rival, LG.

Personally, Siemens was always one of my favourites - my grandfather worked for Siemens in Finland in their power transmssion business so I had lots of weird decommissioned but cool electrical power transmission parts as toys to play with as a child whenever we were visiting the grandparents. Siemens also became one of my first customers after I became an independent consultant. I received a lot of work both from the networks side and handsets side of Siemens over the years and had the honour of presenting to the Siemens Academy. I made many good friends in their organizations all around the globe. Now word comes that especially the 3,000 BenQ jobs in Germany are at risk. My thoughts go out to all BenQ employees, and my very best wishes.

If one could seek a silver lining, today at least the mobile telecoms industry is in strong growth all over, so hopefully for anyone suddenly without a job, it becomes easier to discover a new employer and hopefully an unstressful time of change.

My thoughts are with my BenQ friends today.

Darwin strikes again at the Telegraph

The newspaper industry is having a torrid time of it. We must adapt or face decline, says Telegraph chief

CEO Murdoch McLennan said

The competition - not just from our traditional print rivals - is changing, growing and becoming fiercer. Readers are migrating online, and advertisers are following them. People are demanding customised news, wherever and whenever they want it. We have to adapt to these realities, or face a future of decline which goes to the very heart of our business. The competition - not just from our traditional print rivals - is changing, growing and becoming fiercer. Readers are migrating online, and advertisers are following them. People are demanding customised news, wherever and whenever they want it. We have to adapt to these realities, or face a future of decline which goes to the very heart of our business.

As big as the challenges are, there are unparalleled opportunities, too. In a multimedia world, strong brands will flourish. And the Telegraph - with its hallmarks of honesty, integrity and reliability - is perfectly placed to become the digital market leader in news and comment.

There should be no limit to our ambitions, provided we embrace this sea change in the information society with imagination and determination. There should be no limit, either, to what our brilliant journalists and writers can achieve, with the unlimited space of the web - and other new platforms - at our disposal.

Something that Rupert Murdoch mused upon last year Big Media vs. The People. Rupert tells it how it is

In a excerpt from that speech, Rupert says

What is happening right before us is, in short, a revolution in the way young people are accessing news. They don’t want to rely on the morning paper for their up-to-date information. They don’t want to rely on a God-like figure from above to tell them what’s important. And to carry the religion analogy a bit further, they certainly don’t want news presented as gospel.

Instead, they want their news on demand, when it works for them. They want control over their media, instead of being controlled by it. They want to question, to probe, to offer a different angle.

In the face of this revolution, however, we’ve been slow to react. We’ve sat by and watched while our newspapers have gradually lost circulation. Where four out of every five Americans in 1964 read a paper every day, today, only half do. Among just younger readers, the numbers are even worse, as I’ve just shown.

As we have often argued, until I feel I am blue iin the face newspapers and local newspapers can be and should be at the heart of the conversation.

The monetisation of this is a challenge, but if models can be developed that better serve advertisers and the newspaper readers in a digital world, perhaps some papers might be saved.

But I reckon we are going to see some national newspapers close. The division of journalism, the commercial arm and the technology department has to become more fluid. A digital strategy has to reside at the very heart of what newspapers do not at the periphary.

Digital natives are beginning to room this planet in increasing numbers... as Darwin said its not the strongest or most intelligent that survive. We all know how that sentence ends.

And boards only spend approx. about 3% of their time thinking about the future.

The BBC accelerate into the world of web 2.0

A BBC statement was issued concerning a big deal the beeb has done with microsoft

BBC signs web deal with Microsoft

The memorandum of understanding will define the framework within which the companies can explore opportunities for the delivery and consumption of BBC content and the evolution of next-generation broadcasting.

This includes plans for its online archive, for a radically reinvented website in the web 2.0 world - a second generation of internet-based services - and for ways to share its online content in the future.

Areas of potential collaboration include search and navigation, distribution and content enablement.

I am sure the commercial sector will see this as a further threat to their existence?

HMV cuts prices in attempt to boost sales

The Guardian writes

HMV group, which owns Waterstone's, today said it was cutting the prices of music, DVD and books in an attempt to win back sales from supermarkets and online retailers.

At the start of the month, it reduced the prices of large amounts of its CD and DVD back catalogue to between £5 and £10, hoping the move would boost sales in the run-up to Christmas.

Will other retailers be next? Its life, but, not as we know it. The changing retail high street And I hate to shop but I love ebay

But there is a fightback - but is it too late?

Tough competition from companies such as Amazon and Tesco saw HMV's like for like sales slide 3.7% for the 12 weeks to September 23, stripping out the benefit of its recent acquisition of the Ottakar's bookstore chain. Waterstone's has cancelled its online deal with Amazon and introduced its own website, offering a choice of more than 2m titles. The service includes free delivery on orders of more than £15 and an "ask a bookseller" function for personal e-mail recommendations.

Cyworld is like MySpace 2 years into future says Herald Tribune

The International Herald Tribune on Monday 25 September 2006 ran a big article on Social Networking Sites. Part of the big news is that Cyworld is now spreading beyond South Korea, and just launching in the USA. Readers of our blog know more than a third of all South Koreans are active inside Cyworld. But the article now tells us that Cyworld is spreading fast. Already 2 million users in China, launched in Taiwan and Japan, Cyworld launched in the USA and will launch in Germany before the end of 2006.

Alan and I are big fans of Cyworld and write about it regularly, such as these Cyworld: When Habbo Hotel meets Blogging, and 46,000 Citizen Reporters Can't Be Wrong and when the first announcements were made of Cyworld launching in America. We also love MySpace, and have tracked its meteoric rise and influence with numerous postings such as the Battle for My (voice) Space,  Stumbling upon Lily at MySpace, and Financial Times on MySpace and Broadcast Media.

Certainly with Ohmy News, YouTube and Habbo Hotel, Cyworld and MySpace are definitely among our favourite stories at this Communities Dominate blogsite. But being on different continents and having matured in their own ways of natural selection - and within the limits and opportunities of their home markets - it is no surprise that now MySpace users find Cyworld fantastic and extremely advanced. The Herald Tribune writes quoting people who have now used both: "Cyworld is more advanced than other social networking services" and "MySpace is an early version of Cyworld" and perhaps most tellingly: "After Cyworld opened, I hardly touched MySpace."

Why is this? Mostly it is because MySpace grew up in America and had to rely on "internet economics" to deliver its business logic - attract the eye balls, sell advertising. MySpace had the benefit of the most mature internet market, very high PC accessability and high broadband penetration. Then finding a wealthy buyer in Rupert Murdoch who bought the service and now bankrolls it as we wrote in Darwinism Rudely Arrives in our Media Ecology. The natural evolution of MySpace has suffered from America's lag in 3G cameraphone adoption and use among its target audience, although by the spring of this year, the m:Metrics survey released May 2006 showed that 33% of Americans age 18-24 already use cameraphones to post pictures to MySpace and other social networking sites like Flickr etc. Americans are usually surprised to find that for example in Britain, over 90% of the 12 year olds have cellphones.

But Cyworld is based in South Korea, the most digitally advanced country in the world. It has every advantage. The highest broadband penetration rate in the world - or actually neck-to-neck with Hong Kong to be precise. The highest penetration of 3G phones (over 50%, Japan a close second). The first country to launch mobile digital TV broadcasts over a year ago and already over 4% of all South Koreans have bought the new top-end TV-phones (there are no handset subsidies in Korea so they pay from 500 to 800 dollars for these ultimate top-end phones). 4% might not seem like a high number, but it is incredibly rapid. Blackberry is considered a big success. It has spent 5 years and still does not have 4% of the American population. Apple's darling, the iPod, took well over three years from launch to break 4% of the USA population. 3G next generation mobile phones first launched in Japan five years ago, took over three years to reach 4%. So for a gadget more expensive than a Blackberry, iPod or 3G phone (subsidised in Japan) - that TV-phones have achieved 4% penetration in little over one year is quite impressive indeed. But I digress - about Digital Korea.. Credit cards? 50% of South Koreans already use the credit card or debit card function on their mobile phones. The cities are now building intelligent parking lots to tell you where is the nearest available parking place. One in ten Koreans play online videogames every day. Worldwide about 5% of all web users maintain blogsites, in Korea it is over one third of the total population. 45% of all music sold in South Korea goes directly to mobile phones - note that iTunes accounts for only about 5% of the music sales in the USA. The Korean government aim is to have a robot in every home in ten years. South Korea is truly science fiction.

Specifically the monetary dimension of Cyworld was founded on solid economics. The Cyworld users would buy and sell content using a payment mechanism called the acorn (worth about 10 cents). These can be easily purchased on your mobile phone. So right from the start, Cyworld had a solid economic foundation to rapidly grow and build a robust foundation for success.

So Cyworld has had the benefit of a technology incubation base literally second to none. Even Japan is behind South Korea as a digital society, and California is years behind these two. With that, Cyworld has been able to spread and develop well beyond any other social networking site. Targeting first the youth, it has since spread well beyond its target demographic. Politicians, TV celebrities, pop music stars etc maintain a Cyworld presence. But even more, the economy on the whole. Once you have over a third of the total population active in that new medium, you have to be there too. All significant South Korean businesses already maintain a presence inside Cyworld. Its no longer a question of "should" Coca Cola or Nike or Ford find marketing tools to join MySpace. In Korea every consumer brand HAS to be inside CyWorld. 30,000 businesses, offer over 500,000 items of digital content for sale already. An honest virtual economy eco-system. And like we've mentioned here, Cyworld is now the biggest music sales outlet in Korea, selling over 200,000 songs every day to its members.

There are many elements that seem very "cute" for Western eyes, a certain "Pokemon" or "Hello Kitty" kind of Asian element. Some will claim this taints the service and prevents its ascendancy. I am not so sure.

The article also catalogues several other social networking sites that hold a top ranking in their national markets, like Mixi in Japan and Wrench in Taiwan. But I am now intrigued in the "competition" that arises - MySpace vs Cyworld? MySpace is the obvious global leader with over 100 million uses, but Cyworld has over 21 million. If these early opinions by people who have tried both MySpace and Cyworld prove indicative of the trend, then we might soon see Cyworld becoming a global phenomenon as well. In that case - be VERY alert on the fragile issue of customer loyalty in social networking sites - as we illustrated in the volatility in only 12 months, of users of video sites YouTube, MSN Video, Google Video etc in the blog: Lessons on Volatility in digital communities.

Basketball, money and kids

We all know that many poor kids aspire to the $150 sneakers - it gives them cred in a world that asigns value to objects of desire.

Hey if I wear those sneakers I am someone.

That is the power of brand - However Stephon Marbury the fifth highest paid player in the NBL has created a basketball sneaker for.............$14.98

What he says

You are giving the kid the opportunity to go and buy a pair of shoes, now he can buy on his own... instead of his mother being responsible for something like that and having to spend $150

Right on

This is the beginning of a trend where famous people are more socially aware - and what to do good in the world - sitting in your mansion counting u your millions is not enough

Becks are you reading this

The Financial Times says

the Marbury deal has involved an unusual level of involvement by the athelete not only with in-store apprearences and other promotions, but establishing credibility of a low-cost shoe with a status and brand-conscious urban audience

Central to all of this is: credibility, authenticity a word Marbury uses, and trust

Marbury gets no upfront payment but a revenue share - Dude - put your money where your mouth is.

Via the FInancial Times September 26 2006

The financial Times overview describes this as a socially concerned product not unlike in some ways edun or Howies